The value of one RR point
Jul 20, 2012, 9:37 pm
#1
Original Poster
Join Date: May 2005
Posts: 73
The value of one RR point
I made an award booking today, CMH-BWI. The fare was $127.60, or 6360 RR points + $5. $122.60 / 6360 yields 1.927 cents per RR point. This is surprising to me, as SW tells us RR points are worth 1.67 cents each.
I checked other itineraries, and the value of a RR point is consistently around 1.9 cents.
Thoughts, anyone? Did SW recently change the way it figures up taxes and fees?
I checked other itineraries, and the value of a RR point is consistently around 1.9 cents.
Thoughts, anyone? Did SW recently change the way it figures up taxes and fees?
Jul 20, 2012, 9:59 pm
#2
Join Date: Jul 2001
Posts: 3,973
In January the government required airlines to quote cash fares inclusive of all taxes and fees, but the formula for award trips is based on the pre-tax fare, 60 points per dollar as previously quoted (including the excise tax but not the PFC, security, and whatever other tax was added on). So it looks like the pre-tax fare for that trip was $106.
Jul 21, 2012, 11:14 am
#3
Join Date: Jan 2012
Programs: DL, WoH
Posts: 1,253
Value of SW Points
When figuring the value of SW points I subtracted the Government fee and came out with something like 1.62-1.63 cents per point. Is this correct? I see most people valuing the points at 1.67, but it doesn't include the government fee you have to pay. Thoughts?
Jul 21, 2012, 12:50 pm
#5
Original Poster
Join Date: May 2005
Posts: 73
In January the government required airlines to quote cash fares inclusive of all taxes and fees, but the formula for award trips is based on the pre-tax fare, 60 points per dollar as previously quoted (including the excise tax but not the PFC, security, and whatever other tax was added on). So it looks like the pre-tax fare for that trip was $106.
Jul 21, 2012, 1:01 pm
#6
Join Date: Jan 2012
Programs: DL, WoH
Posts: 1,253
I subtracted the government fee. $2.50 for each leg of the trip. Since you have to pay this out of pocket I wanted to get a value of the points subtracting that fee to get the true out of pocket value. Does that make sense?
Jul 21, 2012, 2:15 pm
#7
Join Date: Oct 2007
Location: RDU, SEA, YVR
Programs: AA, AC, AGR, AS, BA, CX, DL, UA, WN, all non-elite
Posts: 374
The point redemption rate is based on the base fare excluding taxes taxes and fees. The 1.67 cent per point value comes because each dollar of base fare costs 60 points. Since you don't have to pay taxes with award tickets, you actually end up getting a slightly better value than that.
Jul 21, 2012, 2:18 pm
#8
Join Date: Oct 2007
Location: RDU, SEA, YVR
Programs: AA, AC, AGR, AS, BA, CX, DL, UA, WN, all non-elite
Posts: 374
When taxes are a high proportion of the total fare, the value of one RR point increases, since, as rove312 stated above, redemption rates are based on pre-tax base fares. When the ticket is expensive, and hence tax is a smaller percentage of the total fare, the value of one RR point tends closer to 1.67.
Jul 21, 2012, 2:38 pm
#9
Join Date: Jan 2012
Programs: DL, WoH
Posts: 1,253
You're right that you have to pay the Sept 11 security fee for $2.50 per segment, up to $5 per one-way. However, you have to pay this fee if you purchase a ticket anyways.
The point redemption rate is based on the base fare excluding taxes taxes and fees. The 1.67 cent per point value comes because each dollar of base fare costs 60 points. Since you don't have to pay taxes with award tickets, you actually end up getting a slightly better value than that.
The point redemption rate is based on the base fare excluding taxes taxes and fees. The 1.67 cent per point value comes because each dollar of base fare costs 60 points. Since you don't have to pay taxes with award tickets, you actually end up getting a slightly better value than that.
You can get up to almost 1.9cpm on the shorter flights and as low as 1.45cpm on the longer ones. Does my math sound about right?